Squarespace sites come completely optimized for SEO out of the box without you having to do anything at all. A quote from the CEO of SEOmoz, the web's most respected SEO community:
The Squarespace team has put together a remarkable platform. Every aspect of the product - user experience, featureset, SEO friendliness, design and more - all work together to create one of the few content management systems I'm proud to recommend.
(You will also notice that Squarespace is in the screenshot on the front page of SEOmoz)
Further, as a technical summary:
Squarespace produces pages with clean HTML markup.
You have full control over the ordering of your page titles, even down to being able to create different title schemes for your homepage vs item pages and collection pages (done via General Settings).
We generate proper meta tags for all pages.
We generate proper tags to associated RSS feeds for your pages.
We automatically generate a correct robots.txt, link your sitemap, and exclude all Squarespace service/search endpoints.
Image descriptions are converted to alt tags properly.
All primary pages on your Squarespace site contain clean URLs that are easily indexed and read.
Squarespace generates proper rel="canonical" tags that ensure search engines are picking up the proper versions of your pages when content exists at more than one URL.
Given multiple domains, Squarespace will redirect users and search engines to the right domain and use rel="canonical" to fix these references.
Squarespace generates proper Facebook open graph tags that are used when your links are shared on social services.
Squarespace is a paid service that aggressively fights spam. If you are using a free service that is a target for spammers, you potentially run the risk of being falsely grouped with other spam sites.
Even more, when importing from various systems, we ensure your URLs match after moving to Squarespace so that your already ranked content doesn't lose rank when you switch over. Your rank may even improve greatly, due to the items listed above. We've seen this happen frequently.